Sustainable solutions with industrial clusters: Part 1

Decarbonising an industrial cluster requires a methodical techno-economic evaluation based on the carbon abatement cost curve.

Joris Mertens
KBC (A Yokogawa Company)

Viewed : 312

Article Summary

Industrial clusters represent a substantial part of global greenhouse gas emissions. The combined annual CO2 emissions of the 20 signatory clusters of the World Economic Forum exceed 600 million tonnes (WEF, 2023). Meanwhile, the European Expert Group on Clusters identifies at least 3,000 industrial clusters in the EU alone (European Commission, 2021).

Rather than defined in terms of size and industry type, industrial clusters refer to various facilities in reasonable proximity but generally owned by different entities. Clusters are better positioned to successfully decarbonise than isolated individual industrial sites because of the higher potential to integrate resources via collaboration.

Accomplishing this potential, however, is complex. It involves digitalisation, process technology, economics and, possibly most challenging, trust and active collaboration between players across different industries as well as potential competitors.

Optimising industrial systems include three dimensions: Scope, Scale and Frequency, as shown in Figure 1. Scope refers to the utilities, feeds, and products integrated in the system optimisation. Scale pertains to the selection of sites within the industrial cluster. Lastly, Frequency relates to the time dimension of cluster optimisation (real-time, daily, monthly). The industrial system is optimised when the cluster operates as a system of systems (SoS) that accounts for all aspects of Scope, Scale, and Frequency.

Due to the complexity, such an integrated SoS for a large industrial zone does not yet exist, posing the question: What is the best approach to building one?

A recommended approach involves two work streams: an offline desktop trajectory development, which uses a model or digital twin of the system, and an implementation stream.

Part 1 of this article discusses developing a decarbonisation trajectory, while Parts 2 and 3 will focus on implementing the decarbonisation trajectory and how to sustain the benefits of an optimised industrial cluster.
It is important to note that the two work streams should not be fully separated exercises.

Decarbonisation trajectory development
The trajectory development for decarbonisation is a work stream conducted offline. As shown in Figure 2, it consists of the following consecutive steps:
• Identify the steps that can contribute to decarbonisation.
• Compile a ranking order for implementation based on carbon abatement cost while accounting for risk and capital requirements.
• Build a trajectory.

This exercise applies to decarbonising both individual sites and industrial clusters. The size of industrial clusters and the fact that clusters are systems with distributed ownership further complicates the process.

Identifying decarbonisation contributors
The plans and decarbonisation targets for the individual sites are the basic inputs for developing the decarbonisation strategy for the cluster. Additionally, the future infrastructure and system characteristics and constraints need to be understood. This includes the following factors:
• Carbon intensity of grid electricity
• New industrial entrants and leavers
• CO2 storage options
• Electricity grid constraints
• Infrastructural projects considered or planned relating to, for example, the power grid, district heating, H2 or CO2 infrastructure. 

The technical options can be bundled into the following classes:
• Low-to-medium investment cost options include real-time optimisation, flaring reduction, and energy system optimisation that require limited equipment changes, such as exchangers and smaller drivers. Additionally, it involves a small investment in piping infrastructure and limited enhancements to site or cluster power infrastructure.
• Inter-site collaboration will be incentivised when adjacent sites integrate utility systems. Although capital costs can vary widely, they are expected to range from medium to very high. However, optimising production processes by exchanging products or optimising product logistics presents additional opportunities to offset costs.
• High to very high investment options involve optimising capital energy systems (such as large compressors, gas turbines), revamping process units, fortifying the major grid, and creating district heating systems. With a capital cost reaching billions for a large steel plant, switching coke-fed blast furnace steel making to direct reduced iron (DRI) using hydrogen can be the ultimate example of a site/process-related decarbonisation project.
• Novel technology or application of existing technologies such as advanced electrification (e-furnaces/boilers), hydrogen or ammonia firing heat pumps.
• Carbon capture and storage (CCS) is a form of waste disposal. In spite of the high energy consumption and capital cost involved, CCS is a lower-cost emission reduction option for some applications than what is offered by current alternatives.
• Carbon capture and utilisation (CCU) can contribute significantly to a decarbonisation strategy. However, it runs into some significant cost constraints:
    ν A techno-economic study evaluated nine different carbon utilisation technologies (Mertens, et al., 2022) (Mertens, et al., 2023). The findings highlighted that most of these technologies require large amounts of expensive green hydrogen, which renders them economically unviable unless the products generated are valued substantially higher than their fossil counterparts.

One high-value market already exists for sustainable aviation fuel (SAF). From 2030 onwards, specific e-SAF mandates will provide more support for carbon utilisation.

ν Burning fuels produced from CO2 originating from fossil sources still results in net CO2 emissions. Therefore, producers of fossil CO2 should not be exempt from emission taxation or trading scheme obligations, even when the CO2 generated is used to make products.

European legislation will likely mandate that CO2 used as a raw material to produce new products stems from either biogenic sources or direct air capture rather than from combusted fossil fuels. This approach increases operating costs for carbon utilisation projects and may limit the available CO2.

Add your rating:

Current Rating: 3

Your rate: